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EXHIBIT 10.19
APACHE CORPORATION
MONEY PURCHASE RETIREMENT PLAN
JANUARY 1, 1997
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TABLE OF CONTENTS
PAGE
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ARTICLE I DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Account Owner . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.3 Affiliated Entity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.4 Alternate Payee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.5 Annual Addition. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.6 Code. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.7 Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.8 Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.9 Company Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.10 Company Mandatory Contributions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.11 Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.12 Covered Employee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.13 Determination Date. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.14 Disability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.15 Domestic Relations Order . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.16 Employee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.17 Employment Commencement Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.18 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.19 Five-Percent Owner . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.20 Highly Compensated Employee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.21 Hour of Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.22 Key Employee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.23 Lapse in Apache Employment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.24 Limitation Year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.25 Non-Highly Compensated Employee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.26 Non-Key Employee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.27 Normal Retirement Age . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.28 Participant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.29 Period of Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.30 Plan Year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.31 Qualified Domestic Relations Order ("QDRO"). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.32 Qualified Joint and Survivor Annuity ("QJSA") . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.33 Qualified Pre-Retirement Survivor Annuity ("QPSA") . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.34 Reemployment Commencement Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.35 Required Beginning Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.36 Spouse . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.37 Termination from Service Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.38 Valuation Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
1.39 Year of Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
ARTICLE II PARTICIPATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.1 Participation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.2 Reemployment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.3 Enrollment Procedure. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
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ARTICLE III CONTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.1 Company Contributions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.2 Participant Contributions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.3 Return of Contributions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.4 Limitation on Annual Additions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
ARTICLE IV INTERESTS IN THE TRUST FUND . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
4.1 Participants' Accounts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
4.2 Valuation of Trust Fund. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
4.3 Allocation of Increase or Decrease in Net Worth. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
ARTICLE V AMOUNT OF BENEFITS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
5.1 Vesting Schedule. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
5.2 Forfeitures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
5.3 Restoration of Forfeitures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
5.4 Method of Forfeiture Restoration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
5.5 Allocation of Forfeitures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
5.6 Credits for Pre-Lapse Service. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
5.7 Transfers - Portability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
5.8 Reemployment - Separate Account. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
ARTICLE VI DISTRIBUTION OF BENEFITS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
6.1 Beneficiaries. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
6.2 Distributable Amount. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
6.3 Manner of Distribution. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
6.4 Time of Distribution. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
6.5 Direct Rollover Election. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
ARTICLE VII ALLOCATION OF RESPONSIBILITIES - NAMED FIDUCIARIES . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
7.1 No Joint Fiduciary Responsibilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
7.2 The Company. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
7.3 The Trustee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
7.4 The Committee - Plan Administrator. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
7.5 Committee to Construe Plan. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
7.6 Organization of Committee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
7.7 Interested Committee Members. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
7.8 Agent for Process. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
7.9 Indemnification of Committee Members. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
7.10 Conclusiveness of Action. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
7.11 Payment of Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
ARTICLE VIII TRUST AGREEMENT - INVESTMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
8.1 Trust Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
8.2 Expenses of Trust. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
8.3 Investments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
ARTICLE IX TERMINATION AND AMENDMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
9.1 Termination of Plan or Discontinuance of Contributions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
9.2 Allocations upon Termination or Discontinuance of Company Contributions . . . . . . . . . . . . . . . . . . . . 20
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9.3 Procedure Upon Termination of Plan or Discontinuance of Contributions. . . . . . . . . . . . . . . . . . . . . 20
9.4 Amendment by Apache. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
ARTICLE X PLAN ADOPTION BY AFFILIATED ENTITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
10.1 Adoption of Plan. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
10.2 Agent of Affiliated Entity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
10.3 Disaffiliation and Withdrawal from Plan. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
10.4 Effect of Disaffiliation or Withdrawal. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
10.5 Distribution Upon Disaffiliation or Withdrawal. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
ARTICLE XI TOP-HEAVY PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
11.1 Application of Top-Heavy Provisions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
11.2 Determination of Top-Heavy Status. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
11.3 Special Vesting Rule. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
11.4 Special Minimum Contribution. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
11.5 Change in Top-Heavy Status. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
ARTICLE XII MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
12.1 RIGHT TO DISMISS EMPLOYEES - NO EMPLOYMENT CONTRACT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
12.2 Claims Procedure. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
12.3 Source of Benefits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
12.4 Exclusive Benefit of Employees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
12.5 Forms of Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
12.6 Failure of Any Other Entity to Qualify. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
12.7 Notice of Adoption of the Plan. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
12.8 Plan Merger. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
12.9 Inalienability of Benefits - Domestic Relations Orders. . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
12.10 Payments Due Minors or Incapacitated Individuals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
12.11 Uniformity of Application. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
12.12 Disposition of Unclaimed Payments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
12.13 Applicable Law. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
ARTICLE XIII UNIFORMED SERVICES EMPLOYMENT AND REEMPLOYMENT RIGHTS ACT OF 1994 . . . . . . . . . . . . . . . . . . . 29
13.1 General. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
13.2 While a Serviceman. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
13.3 Failure to Return. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
13.4 Return From Uniformed Service. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Appendix A -- Participating Companies
Appendix B -- DEKALB Energy Company
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APACHE CORPORATION
MONEY PURCHASE RETIREMENT PLAN
PREAMBLE
Apache Corporation, a Delaware corporation ("Apache"), hereby
establishes this money purchase pension plan (the "Plan"), which is intended to
be qualified under Code section 401(a). The Plan is effective as of January 1,
1997.
Each Appendix to this Plan is a part of the Plan document. It is
intended that an Appendix will be used to (1) describe which business entities
are actively participating in the Plan, (2) describe any special participation,
eligibility, vesting, or other provisions that apply to the employees of a
business entity, (3) describe any special provisions that apply to Participants
affected by a designated corporation transaction, and (4) describe any special
distribution rules that apply to directly transferred benefits from other
plans.
ARTICLE I
DEFINITIONS
The following words and phrases shall have the meaning set forth
below:
1.1 "Account Owner" means a Participant who has an Account balance, an
Alternate Payee who has an Account balance, or a beneficiary who has obtained
an interest in the Account of the previous Account Owner because of the
previous Account Owner's death.
1.2 "Account" means the account established pursuant to section 4.1.
1.3 "Affiliated Entity" means:
(a) For all purposes of the Plan except those listed in subsection
(b), the term "Affiliated Entity" means any legal entity that is treated as a
single employer with Apache pursuant to Code section 414(b), 414(c), 414(m), or
414(o).
(b) For purposes of determining Annual Additions under section
1.5, limiting Annual Additions to a Participant's Account under section 3.4,
and construing the defined terms as they are used in sections 1.5 and 3.4 (such
as " Compensation" and "Employee"), the term "Affiliated Entity" means any
legal entity that is treated as a single employer with Apache pursuant to Code
section 414(m) or 414(o), and any legal entity that would be an Affiliated
Entity pursuant to Code section 414(b) or 414(c) if the phrase "more than 50%"
were substituted for the phrase "at least 80%" each place it occurs in Code
section 1563(a)(1).
1.4 "Alternate Payee" means a Participant's Spouse, former spouse, child,
or other dependent who is recognized by a QDRO as having a right to receive
all, or a portion of, the benefits payable under this Plan with respect to such
Participant.
1.5 "Annual Addition" means the allocations to a Participant's Account for
any Limitation Year, as described in detail below.
(a) Annual Additions shall include: (i) Company Contributions
(except as provided in paragraphs (b)(iii) and (b)(v)) to this Plan and Company
contributions to any other defined contribution plan maintained by the Company
or any Affiliated Entity, (ii) after-tax contributions to any other defined
contribution plan maintained by the Company or an Affiliated Entity; (iii)
elective deferrals by the Participant, pursuant to Code section 401(k), to any
other defined contribution plan maintained by the Company or an Affiliated
Entity; (iv) forfeitures allocated to a Participant's Account in this Plan and
any other defined contribution plan maintained by the Company or any Affiliated
Entity (except as provided in paragraphs (b)(iii) and (b)(v) below); (v) all
amounts paid or accrued to a welfare benefit fund as defined in Code section
419(e) and allocated to the separate account (under the welfare
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benefit fund) of a Key Employee to provide post-retirement medical benefits;
and (vi) contributions allocated on the Participant's behalf to any individual
medical account as defined in Code section 415(l)(2).
(b) Annual Additions shall not include: (i) rollover
contributions made pursuant to Code section 402(c), 403(a)(4), 403(b)(8),
405(d)(3), 408(d)(3), or 409(b)(3)(C) to any defined contribution plan
maintained by the Company or an Affiliated Entity; (ii) repayments of loans
made to a Participant from a qualified plan maintained by the Company or any
Affiliated Entity; (iii) repayments of forfeitures for rehired Participants, as
described in Code sections 411(a)(7)(B) and 411(a)(3)(D); (iv) direct transfers
of funds from one qualified plan to any qualified plan maintained by the
Company or any Affiliated Entity; or (v) repayments of forfeitures of missing
individuals pursuant to section 12.12.
1.6 "Code" means the Internal Revenue Code of 1986, as amended from time
to time, and the regulations and rulings in effect thereunder from time to
time.
1.7 "Committee" means the administrative committee provided for in section
7.4.
1.8 "Company" means Apache, any successor thereto, and any Affiliated
Entity that adopts the Plan pursuant to Article X. Each Company is listed in
Appendix A.
1.9 "Company Contributions" means all contributions to the Plan made by
the Company pursuant to section 3.1 for the Plan Year.
1.10 "Company Mandatory Contributions" means all contributions to the Plan
made by the Company pursuant to subsection 3.1(a) for the Plan Year.
1.11 "Compensation" means:
(a) Code Section 415 Compensation.
(i) 1997. This paragraph applies for 1997 only. For
purposes of determining the limitation on Annual Additions under
section 3.4 and the minimum contribution under section 11.4 when the
Plan is top-heavy, Compensation shall mean those amounts reported as
"wages, tips, other compensation" on Form W-2 by the Company or an
Affiliated Entity. For purposes of section 3.4, Compensation shall be
measured over a Limitation Year. For purposes of section 11.4,
Compensation shall be measured over a Plan Year.
(ii) 1998 and Thereafter. This paragraph applies after
1997. For purposes of determining the limitation on Annual Additions
under section 3.4 and the minimum contribution under section 11.4 when
the Plan is top-heavy, Compensation shall mean those amounts reported
as "wages, tips, other compensation" on Form W-2 by the Company or an
Affiliated Entity and elective contributions that are not includable
in the Employee's income pursuant to Code sections 125, 402(e)(3),
402(h), 403(b), 408(p), or 457. For purposes of section 3.4,
Compensation shall be measured over a Limitation Year. For purposes
of section 11.4, Compensation shall be measured over a Plan Year.
(b) Code Section 414(q) Compensation.
(i) 1997. This paragraph applies for 1997 only. For
purposes of identifying Highly Compensated Employees and Key
Employees, Compensation shall mean those amounts reported as "wages,
tips, other compensation" on Form W-2 by the Company or an Affiliated
Entity; Compensation shall also include elective contributions that
are not includable in the Employee's income pursuant to Code sections
125, 402(e)(3), 402(h)(1)(B), or 403(b). Compensation shall be
measured over a Plan Year. Compensation shall include only amounts
paid to the Employee, and shall not include any additional amounts
accrued by the Employee.
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(ii) 1998 and Thereafter. This paragraph applies after
1997. For purposes of identifying Highly Compensated Employees and
Key Employees, Compensation shall mean those amounts reported as
"wages, tips, other compensation" on Form W-2 by the Company or an
Affiliated Entity, and elective contributions that are not includable
in the Employee's income pursuant to Code sections 125, 402(e)(3),
402(h), 403(b), 408(p), or 457. Compensation shall be measured over a
Plan Year. Compensation shall include only amounts paid to the
Employee, and shall not include any additional amounts accrued by the
Employee.
(c) Benefit Compensation. For purposes of determining and
allocating Company Mandatory Contributions under subsection 3.1(a),
Compensation shall generally mean regular compensation paid by the Company.
(i) Specifically, Compensation shall include:
(A) Regular salary or wages,
(B) Overtime pay,
(C) Bonuses,
(D) Salary reductions pursuant to the Apache
Corporation 401(k) Savings Plan,
(E) Salary reductions that are excludable from an
Employee's gross income pursuant to Code
section 125, and
(F) Amounts contributed as salary deferrals to
the Company's Nonqualified Retirement/Savings
Plan.
(ii) Compensation shall exclude:
(A) Commissions,
(B) Severance pay,
(C) Moving expenses,
(D) Any gross-up of moving expenses to account
for increased income or employment taxes,
(E) Foreign service premiums paid as an
inducement to work outside of the United
States,
(F) Credits or benefits under this Plan and
credits or benefits under the Apache
Corporation 401(k) Savings Plan (except as
provided in subparagraph (i)(D)),
(G) Other contingent compensation,
(H) Any amount relating to the granting of a
stock option by the Company or an
Affiliated Entity, the exercise of such a
stock option, or the sale or deemed sale of
any shares thereby acquired,
(I) Contributions to any other fringe benefit
plan (including, but not limited to,
overriding royalty payments or any other
exploration-related payments),
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(J) Bonuses paid as an inducement to enter the
employment of the Company, and
(K) Any amount paid pursuant to the Apache
Corporation 1996 Share Price Appreciation
Plan.
Compensation shall be measured over that portion of a Plan Year while the
Employee is a Covered Employee. Compensation shall include only amounts paid
to the Employee during the Plan Year, and shall not include any amounts accrued
by but not paid to the Employee during the Plan Year.
(d) Limit on Compensation. For purposes of calculating the
minimum contribution required in top-heavy years under subsection (a) and for
all purposes of subsection (c), the Compensation taken into account for the
Plan Year shall not exceed the dollar limit specified in Code section
401(a)(17) in effect for the Plan Year.
1.12 "Covered Employee" means any Employee of the Company, with the
following exceptions. A leased employee within the meaning of Code section
414(n)(2) shall not be a Covered Employee. A non-resident alien shall not be a
Covered Employee. An Employee included in a unit of Employees covered by a
collective bargaining agreement shall not be a Covered Employee unless the
collective bargaining agreement specifically provides for such Employee's
participation in the Plan. An Employee whose job is classified as "temporary"
shall be a Covered Employee only after he or she has worked for the Company and
Affiliated Entities for six consecutive months. An Employee shall not be a
Covered Employee while he or she is classified as an "intern," a "consultant,"
or an "independent contractor."
1.13 "Determination Date" means, with respect to each Plan Year, the last
day of the preceding Plan Year; provided however, that in the case of the first
Plan Year of the Plan, the Determination Date shall be the last day of the
first Plan Year.
1.14 "Disability" means a disability due to sickness or injury which
renders an Employee incapable of performing any services for the Company or an
Affiliated Entity for which the Employee is qualified by education, training,
or experience. Evidence of disability satisfactory to Apache shall be
required.
1.15 "Domestic Relations Order" means any judgment, decree, or order
(including approval of a property settlement agreement) issued by a court of
competent jurisdiction that relates to the provisions of child support,
alimony, or maintenance payments, or marital property rights to a Spouse,
former spouse, child, or other dependent of the Participant and is made
pursuant to a state domestic relations law (including a community property
law).
1.16 "Employee" means each individual who performs services for the Company
or an Affiliated Entity and whose wages are subject to withholding by the
Company or an Affiliated Entity. The term "Employee" shall include only
individuals currently performing services for the Company or an Affiliated
Entity, and shall exclude former Employees who are still being paid by the
Company or an Affiliated Entity (whether through the payroll system, through
overriding royalty payments, through exploration-related payments, or
otherwise). The term "Employee" shall also include leased employees within the
meaning of Code section 414(n)(2); however, if leased employees constitute 20%
or less of the Non-Highly Compensated Employees of the Company and any
Affiliated Entities, the term "Employee" shall not include any leased employee
covered by a qualified plan described in Code section 414(n)(5)(B) that is
maintained by the leased employee's employer.
1.17 "Employment Commencement Date" means the date on which an Employee
first performs an Hour of Service.
1.18 "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and the regulations and rulings in effect thereunder from time to
time.
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1.19 "Five-Percent Owner" means:
(a) With respect to a corporation, any individual who owns (either
directly or indirectly according to the rules of Code section 318) more than 5%
of the value of the outstanding stock of the corporation or stock processing
more than 5% of the total combined voting power of all stock of the
corporation.
(b) With respect to a non-corporate entity, any individual who
owns (either directly or indirectly according to rules similar to those of Code
section 318) more than 5% of the capital or profits interest in the entity.
An individual shall be a Five-Percent Owner for a particular year if such
individual is a Five-Percent Owner at any time during such year.
1.20 "Highly Compensated Employee" means, for each Plan Year:
(a) An Employee with Compensation of $80,000 (as adjusted by the
Secretary of the Treasury) or more during the immediately preceding Plan Year,
and
(b) An Employee who is a Five-Percent Owner during the current
Plan Year or who was a Five-Percent Owner during the immediately preceding Plan
Year.
1.21 "Hour of Service" means each hour for which an Employee is paid or
entitled to payment by the Company or an Affiliated Entity for the performance
of duties for the Company or an Affiliated Entity during the applicable
computation period. Hours of Service shall be credited to the Employee for the
computation period or periods in which the duties are performed, regardless of
when the Employee is paid for those duties.
1.22 "Key Employee" means an individual described in Code section 416(i)(1)
and the regulations promulgated thereunder.
1.23 "Lapse in Apache Employment" means the period commencing on the
Termination from Service Date and ending on the Reemployment Commencement Date.
A Participant shall incur a one-year Lapse in Apache Employment if the
Participant does not perform an Hour of Service in the 12-month period
beginning on any anniversary of his or her Termination from Service Date.
1.24 "Limitation Year" means the calendar year.
1.25 "Non-Highly Compensated Employee" means an Employee who is not a
Highly Compensated Employee.
1.26 "Non-Key Employee" means an Employee who is not a Key Employee.
1.27 "Normal Retirement Age" means age 65.
1.28 "Participant" means any individual with an Account balance under the
Plan except beneficiaries and Alternate Payees. The term "Participant" shall
also include any individual who has accrued a benefit pursuant to subsection
3.1(a), but who does not yet have an Account balance.
1.29 "Period of Service" means the following.
(a) General Rule. A period commencing on an Employee's Employment
Commencement Date or Reemployment Commencement Date, whichever is applicable,
and ending on his or her Termination from Service Date. A Period of Service
shall also include the period between an Employee's Termination from Service
Date and his or her Reemployment Commencement Date if the Employee does not
incur a one-year Lapse in Apache Employment between such dates; however, the
period between the first and second anniversaries of an Employee's absence from
work because of parental leave (as explained in paragraph 1.37(b)(i)) shall not
be included in the Employee's Period of Service. Periods of Service shall not
include any period following a Participant's
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Termination from Service Date solely because of a severance payment of payments
made to an individual with respect to his or her termination of employment.
(b) Service Before January 1, 1997. A Period of Service shall
include the Employee's service with Apache and its Affiliated Entities before
January 1, 1997.
(c) Service with Acquired Businesses. A Period of Service shall
also include the Employee's service with the following companies. For purposes
of this subsection, a company's "controlled group" means the company and any
business treated as a single employer with such company pursuant to Code
sections 414(b), 414(c), 414(m), or 414(o).
(i) Amoco Production Company's controlled group, for an
Employee who was employed by the Amoco Production Company's controlled
group and who became an Employee of the Company pursuant to the
provisions of that certain Stock Purchase Agreement effective June 30,
1991, between Amoco Production Company, Apache, and others.
(ii) Hadson Energy Resources Corporation's controlled
group, for an Employee who was a common-law employee of Hadson Energy
Resources Corporation or Hadson Energy Limited on January 1, 1994
(which companies became part of Apache's controlled group on November
12, 1993).
(iii) Crystal Oil Company's controlled group, for an
Employee who was employed by the Crystal Oil Company's controlled
group at the time he or she was hired by Apache, provided that he or
she was hired by Apache within a week of December 30, 1994.
(iv) Texaco Exploration & Production, Inc.'s controlled
group, for an Employee who was employed by the Texaco Exploration &
Production, Inc.'s controlled group at the time he or she was hired by
Apache, provided that he or she was hired by Apache in late February
or early March of 1995.
(v) The Phoenix Resource Companies, Inc.'s controlled
group, for an Employee who was employed by The Phoenix Resource
Companies, Inc.'s controlled group at the time he or she was hired by
Apache, provided that he or she was hired by the Company on May 20,
1996.
1.30 "Plan Year" means the 12-month period on which the records of the Plan
are kept, which shall be the calendar year.
1.31 "Qualified Domestic Relations Order ('QDRO')" means a Domestic
Relations Order that creates or recognizes the existence of an Alternate
Payee's right to, or assigns to an Alternate Payee the right to, receive all or
a portion of the benefits payable with respect to a Participant under the Plan
and with respect to which the requirements of Code section 414(p) and ERISA
section 206(d)(3) are met.
1.32 "Qualified Joint and Survivor Annuity ('QJSA')" means:
(a) For a married Participant, a QJSA is an annuity that will
provide equal monthly payments to the Participant for life, and if the
Participant dies before his or her Spouse, the surviving Spouse shall receive
monthly payments for his or her life, with each monthly payment equal to 50% of
the monthly payment that the Participant received before his or her death.
(b) For an unmarried Participant, a QJSA is an annuity that will
provide equal monthly payments to the Participant for life.
1.33 "Qualified Pre-Retirement Survivor Annuity ('QPSA')" means an annuity
that will provide equal monthly payments to the surviving Spouse of a
Participant, for the life of the surviving Spouse.
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1.34 "Reemployment Commencement Date" means the first date following a
Lapse in Apache Employment on which the Employee performs an Hour of Service.
1.35 "Required Beginning Date" means:
(a) Excepted as provided in subsections (b) and (c), Required
Beginning Date means April 1 of the calendar year following the later of (i)
the calendar year in which the Participant attains age 70-1/2, or (ii) the
calendar year in which the Participant terminates employment with Apache and
all Affiliated Entities.
(b) For a Participant who is both an Employee and a Five-Percent
Owner of Apache or an Affiliated Entity, the term "Required Beginning Date"
means April 1 of the calendar year following the calendar year in which the
Five- Percent Owner attains age 70-1/2. If an Employee older than 70-1/2
becomes a Five-Percent Owner, his or her Required Beginning Date shall be April
1 of the calendar year following the calendar year in which he or she becomes a
Five- Percent Owner.
(c) If a Participant is rehired after his or her Required
Beginning Date, and he or she is not a Five- Percent Owner, he or she shall be
treated upon rehire as if he or she has not yet had a Required Beginning Date,
with the result that his or her minimum required distributions under subsection
6.4(c) will be zero until his or her new Required Beginning Date. His or her
new Required Beginning Date shall be determined pursuant to subsections (a) and
(b).
1.36 "Spouse" means the individual of the opposite sex to whom a
Participant is lawfully married according to the laws of the state of the
Participant's domicile.
1.37 "Termination from Service Date" means the earlier of the following
dates:
(a) The last day an Employee performs services for the Company or
an Affiliated Entity if the Employee quits (except as provided in paragraph
(b)(iii)), is discharged, retires, or dies; or
(b) The first anniversary of the day a former Employee is absent
from the Company or Affiliated Entity for any reason other than resignation,
discharge, retirement, or death (such as vacation, holiday, sickness,
disability, leave of absence, or temporary lay-off), with the following
exceptions:
(i) If the former Employee is absent from the Company or
Affiliated Entity because of parental leave (which includes only the
pregnancy of the former Employee, the birth of the former Employee's
child, the placement of a child with the former Employee in connection
with adoption of such child by the former Employee, or the caring for
such child immediately following birth or placement) on the first
anniversary of the day the former Employee was first absent, the
Termination from Service Date shall be the second anniversary of the
day he or she was first absent.
(ii) If the former Employee is absent from the Company or
Affiliated Entity for more than one year because of an approved leave
of absence (either with or without pay) for any reason (including, but
not limited to, jury duty) and the former Employee returns to work at
or prior to the expiration of his or her leave of absence, no
Termination from Service Date shall occur.
(iii) If a former Employee is absent from the Company or an
Affiliated Entity because of a Disability incurred while employed by
the Company or an Affiliated Entity, a Termination from Service Date
shall not occur until the later of the first anniversary of his or her
absence or the date he or she recovers from the Disability, regardless
of whether the former Employee quits during the Disability.
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1.38 "Valuation Date" means the last day of each Plan Year and any other
dates as specified in section 4.2 as of which the assets of the Trust Fund are
valued at fair market value and as of which the increase or decrease in the net
worth of the Trust Fund is allocated among the Participants' Accounts.
1.39 "Year of Service" means all of a Participant's Periods of Service,
expressed in years, and rounded down to the next whole number.
ARTICLE II
PARTICIPATION
2.1 Participation.
Each Covered Employee shall be eligible to participate in the Plan on
the later of January 1, 1997, or the day the Employee first becomes a Covered
Employee. A Covered Employee shall cease to accrue benefits in the Plan on the
day he or she ceases to be a Covered Employee.
2.2 Reemployment.
A rehired Employee shall become eligible to participate in the Plan as
of the later of his or her Reemployment Commencement Date or the date he or she
again becomes a Covered Employee.
2.3 Enrollment Procedure.
Notwithstanding sections 2.1 and 2.2, a Covered Employee shall not be
eligible to participate in the Plan until after completing the enrollment
procedures specified by the Committee. Such enrollment procedures may, for
example, require the Covered Employee to complete and sign an enrollment form
or to complete a voice-response telephone enrollment. The Covered Employee
shall provide the initial investment direction, the address and date of birth
of the Employee, and the name, address, and date of birth of each beneficiary
of the Employee, and any other information requested by the Committee. The
Committee may require that the enrollment procedure be completed a certain
number of days prior to the date any Company Contribution is allocated to the
Covered Employee's Account.
ARTICLE III
CONTRIBUTIONS
3.1 Company Contributions.
(a) Company Mandatory Contributions. For each Plan Year, the
Company shall contribute to the Trust Fund such amount of Company Mandatory
Contributions as are necessary to fund the allocations described in this
subsection. The Company may elect to treat any portion of forfeitures
occurring during the Plan Year as Company Mandatory Contributions, pursuant to
section 5.5. Each "eligible Participant" shall receive an allocation of
Company Mandatory Contributions equal to 6% of the eligible Participant's
Compensation. For purposes of this subsection, an "eligible Participant" is a
Participant who received credit for one Hour of Service as a Covered Employee
during the Plan Year and who is employed by the Company or an Affiliated Entity
on the last day of the Plan Year.
(b) Miscellaneous Contributions.
(i) The Company may make additional contributions to the
Plan to restore amounts forfeited from the Accounts of certain rehired
Participants, pursuant to section 5.4. This additional contribution
shall be required only when the forfeitures occurring during the Plan
Year are insufficient to restore such forfeited amounts, as described
in section 5.5.
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(ii) The Company may make additional contributions to the
Plan to satisfy the minimum contribution required by section 11.4.
The Company may elect to use any portion of forfeitures occurring
during the Plan Year for this purpose, pursuant to section 5.5.
(iii) The Company may make additional contributions to the
Plan to restore the forfeited benefit of any missing individual,
pursuant to section 12.12. This additional contribution shall be
required only when the forfeitures occurring during the Plan Year are
insufficient to restore such forfeited amounts, as described in
section 5.5.
(iv) The Company may make additional contributions to the
Plan to provide make-up contributions for returning servicemen,
pursuant to section 13.4.
(c) Contributions Contingent on Deductibility. The Company
Contributions for a Plan Year (excluding forfeitures and contributions pursuant
to paragraph 3.1(b)(iv)) shall not exceed the amount allowable as a deduction
for Apache's taxable year ending with or within the Plan Year pursuant to Code
section 404. Company Contributions (excluding contributions pursuant to
paragraph 3.1(b)(iv) shall be paid to the Trustee no later than the due date
(including any extensions) for filing the Company's federal income tax return
for such year. Company Contributions shall be made without regard to current
or accumulated earnings and profits. The appropriate contribution of the
Company to the Trust Fund shall be paid by the Company in the form of cash.
3.2 Participant Contributions.
Participants may not contribute to this Plan. The Plan does not
accept rollovers or direct transfers.
3.3 Return of Contributions.
(a) Upon the request of the Company, the Trustee shall return to
the Company, any Company Contribution made under a mistake of fact. The
Trustee may not return any such contribution later than one year after the
Trustee received the contribution. The amount returned shall not exceed the
excess of the amount contributed (reduced to reflect any decrease in the net
worth of the appropriate Accounts attributable thereto) over the amount that
would have been contributed without the mistake of fact. Appropriate
reductions shall be made in the Accounts of Participants to reflect the return
of any contributions previously credited to such Accounts.
(b) Upon the request of the Company, the Trustee shall return to
the Company, any Company Contribution that is not deductible under Code section
404. All contributions under the Plan are expressly conditioned upon their
deductibility for federal income tax purposes. The amount that shall be
returned shall be the excess of the amount contributed (reduced to reflect any
decrease in the net worth of the appropriate Accounts attributable thereto)
over the amount that would have been contributed if there had not been a
mistake in determining the deduction. Appropriate reductions shall be made in
the Accounts of Participants to reflect the return of any contributions
previously credited to such Accounts. Any contribution conditioned on its
deductibility shall be returned only if it is returned within one year after it
is disallowed as a deduction.
(c) A contribution shall be returned under subsection (a) or (b)
only to the extent that its return will not reduce the Account of a Participant
to an amount less than the balance that would have been credited to the
Participant's Account had the contribution not been made.
(d) All Company Contributions are conditioned on the Plan's
initial qualification under Code section 401. The Trustee shall return to the
Company all Company Contributions to the Plan if (i) the Company files the Plan
with the IRS by the end of the time period, including extensions, for filing
Apache's federal income tax return for the year in which the Plan was adopted
(or the Company files the Plan by such later date as the Secretary of the
Treasury may prescribe), and (ii) the Plan receives an adverse determination
with respect to its initial qualification. The Trustee shall return the
Company Contributions within one year of the date of the adverse determination.
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3.4 Limitation on Annual Additions.
(a) Limit. The Annual Additions to a Participant's Account in
this Plan and his or her accounts in any other qualified defined contribution
plan maintained by the Company or an Affiliated Entity for any Limitation Year
shall not exceed in the aggregate the lesser of (i) 25% of such Employee's
Compensation or (ii) $30,000 (as adjusted by the Secretary of the Treasury).
(b) Corrective Mechanism.
(i) Reduction in Annual Additions. A Participant's
Annual Additions shall be reduced, to the extent necessary to satisfy
the foregoing limits, if the Annual Additions arose as a result of a
reasonable error in estimating Compensation, as a result of the
allocation of forfeitures, or as a result of other facts and
circumstances as provided in the regulations under Code section 415.
(ii) Order of Reduction, Multiple Plans. Apache also
maintains the Apache Corporation 401(k) Savings Plan, a profit sharing
plan containing a cash or deferred arrangement. Apache may own more
than 50% of Producers Energy Marketing LLC ("ProEnergy"). When
Apache's ownership of ProEnergy is above 50%, the annual additions to
any qualified defined contribution plan maintained by ProEnergy will
be considered Annual Additions subject to the limitation in subsection
(a). The Participant's Annual Additions shall be reduced, to the
extent necessary, in the following order. First, to the extent that
the Annual Additions in a single plan exceed the limits of subsection
(a), the Annual Additions in that plan shall be reduced, in the order
specified in that plan, to the extent necessary to satisfy the limits
of subsection (a). Then, if the Participant has Annual Additions in
more than one plan and in the aggregate they exceed the limits of
subsection (a), the Annual Additions will be reduced in the following
order: the Annual Additions to the Apache Corporation 401(k) Savings
Plan, in the order specified in that plan; then the Annual Additions
to ProEnergy's plans, in the order specified in those plans; then the
Annual Additions to this Plan.
(iii) Disposition of Excess Annual Additions. Any
reduction of Company Contributions shall be placed in a suspense
account in the Trust Fund and used to reduce future Company
Contributions to the Plan. The following rules shall apply to such
suspense account: (A) no further Company Contributions may be made if
the allocation thereof would be precluded by Code section 415; (B) any
increase or decrease in the net value of the Trust Fund attributable
to the suspense account shall not be allocated to the suspense
account, but shall be allocated to the Accounts; and (C) all amounts
held in the suspense account shall be allocated as of each succeeding
allocation date on which forfeitures may be allocated pursuant to
section 5.5 (and may be allocated more frequently if the Committee so
directs), until the suspense account is exhausted.
ARTICLE IV
INTERESTS IN THE TRUST FUND
4.1 Participants' Accounts.
The Committee shall establish and maintain a separate Account in the
name of each Participant, but the maintenance of such Accounts shall not
require any segregation of assets of the Trust Fund. Each Account shall
contain the Company Contributions allocated to the Participant and the increase
or decrease in the net worth of the Trust Fund attributable to such
contributions.
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4.2 Valuation of Trust Fund.
(a) General. The Trustee shall value the assets of the Trust Fund
at least annually as of the last day of the Plan Year, and as of any other
dates determined by the Committee, at their current fair market value and
determine the net worth of the Trust Fund. In addition, the Committee may
direct the Trustee to have a special valuation of the assets of the Trust Fund
when the Committee determines, in its sole discretion, that such valuation is
necessary or appropriate or in the event of unusual market fluctuations of such
assets. Such special valuation shall not include any contributions made by
Participants since the preceding Valuation Date, any Company Contributions for
the current Plan Year, or any unallocated forfeitures. The Trustee shall
allocate the expenses of the Trust Fund occurring since the preceding Valuation
Date, pursuant to section 8.2, and then determine the increase or decrease in
the net worth of the Trust Fund that has occurred since the preceding Valuation
Date. The Trustee shall determine the share of the increase of decrease that
is attributable to the non-separately accounted for portion of the Trust Fund
and to any amount separately accounted for, as described in subsections (b) and
(c).
(b) Mandatory Separate Accounting. The Trustee shall separately
account for (i) any individually directed investments permitted under section
8.3, and (ii) amounts subject to a Domestic Relations Order, to provide a more
equitable allocation of any increase or decrease in the net worth of the
Accounts.
(c) Permissible Separate Accounting. The Trustee may separately
account for the following amounts to provide a more equitable allocation of any
increase or decrease in the net worth of the Trust Fund:
(i) the distributable amount of a Participant, including
any amount distributable to an Alternate Payee or to a beneficiary of
a deceased Participant; and
(ii) Company Contributions made since the preceding
Valuation Date;
(iii) Any other amounts for which separate accounting will
provide a more equitable allocation of the increase or decrease in the
net worth of the Trust Fund.
4.3 Allocation of Increase or Decrease in Net Worth.
(a) The Committee shall, as of each Valuation Date, allocate the
increase or decrease in the net worth of the Trust Fund that has occurred since
the preceding Valuation Date between the non-separately accounted for portion
of the Trust Fund and the amounts separately accounted for that are identified
in subsections 4.2(b) and 4.2(c).
(b) The increase or decrease attributable to the non-separately
accounted for portion of the Trust Fund shall be allocated among the
appropriate Accounts in the ratio that the dollar value of each such Account
bore to the aggregate dollar value of all such Accounts on the preceding
Valuation Date after all allocations and credits made as of such date had been
completed.
(c) After the allocation in subsection (b) is completed, the
Committee shall allocate any amounts separately accounted for (including the
increase or decrease in the net worth of the Trust Fund attributable to such
amounts) to the appropriate Account.
ARTICLE V
AMOUNT OF BENEFITS
5.1 Vesting Schedule.
(a) General Rule. Unless subsections (b) or (c) provide for
faster vesting, a Participant's interest in his Account shall become vested in
accordance with the following schedule:
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Completed Years of Service Vested Percentage
-------------------------- -----------------
Less than 1 0%
1 20%
2 40%
3 60%
4 80%
5 or more 100%
(b) Full Vesting in Certain Circumstances. A Participant shall
have a fully vested and nonforfeitable interest in his or her Account (i) upon
his or her Normal Retirement Age if he or she is an Employee on such date, (ii)
upon his or her death while an Employee or while on an approved leave of
absence from the Company or an Affiliated Entity, or (iii) upon his or her
termination of employment with the Company or an Affiliated Entity because of a
Disability.
(c) Change of Control. The Accounts of all Participants shall be
fully vested as of the effective date of a "change in control." For purposes
of this subsection, a "change of control" shall mean the event occurring when a
person, partnership, corporation, or other legal entity, together with all
persons, partnerships, corporations, and other legal entities acting in concert
with such person, partnership, corporation, or other legal entity, or any or
all of them, acquires more than 20% of Apache's outstanding voting securities;
provided that a change of control shall not occur if, prior to the acquisition
of more than 20% of Apache's voting securities, Apache's Board of Directors by
majority vote designates the person, partnership, corporation, or other legal
entity as an approved acquiror and resolves that a change of control will not
occur for purposes of this Plan.
5.2 Forfeitures.
(a) Notwithstanding the vesting rules of section 5.1, Annual
Additions to a Participant's Accounts and any increase or decrease in the net
worth of the Participant's Accounts attributable to such Annual Additions may
be reduced to satisfy the limits described in section 3.4. Any reduction shall
be allocated as specified in section 3.4.
(b) Notwithstanding the vesting rules of section 5.1, a missing
individual's vested Accounts may be forfeited as of the last day of any Plan
Year, as provided in section 12.12. Any such forfeiture shall be allocated as
specified in section 5.5.
(c) A Participant's non-vested interest in his or her Account
shall be forfeited at the end of the Plan Year in which the Participant
terminates employment. Any such forfeiture shall be allocated as specified in
section 5.5.
5.3 Restoration of Forfeitures.
(a) The forfeiture of a missing individual's Account, as described
in section 12.12, shall be restored to such individual if the individual makes
a claim for such amount.
(b) If a Participant is rehired before incurring five-consecutive
one-year Lapses in Apache Employment, and the Participant has received a
distribution of his or her entire vested interest in his or her Account (with
the result that the Participant forfeited his or her non-vested interest in
such Account), then the exact amount of the forfeiture shall be restored to the
Participant's Account. All the rights, benefits, and features available to the
Participant when the forfeiture occurred shall be available with respect to the
restored forfeiture.
(c) If a Participant who is rehired before incurring five
consecutive one-year Lapses in Apache Employment has his or her Accounts
restored as above provided, and again terminates employment prior to becoming
fully vested in his or her Account, the vested portion of his or her Account
shall be determined by applying the vested percentage determined under section
5.1 to the sum of (A) and (B), then subtracting (B) from
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such sum, where: (A) is the value of the Participant's Account as of the
Valuation Date immediately following his or her most recent termination of
employment; and (B) is the amount previously distributed to the Participant on
account of the prior termination of employment.
(d) If a Participant is rehired after having incurred five
consecutive one-year Lapses in Apache Employment, then no amount forfeited from
his or her Account shall be restored to that Account.
5.4 Method of Forfeiture Restoration.
Forfeitures that are restored pursuant to section 5.3 shall be
accomplished by an allocation of the forfeitures occurring during the Plan
Year, pursuant to section 5.5, or if such forfeitures are insufficient, by a
special Company Contribution, pursuant to paragraph 3.1(b)(i).
5.5 Allocation of Forfeitures.
The forfeitures that occur during a Plan Year shall be allocated first
to restore the forfeited portions of the Accounts of reemployed Participants
described in section 5.3. Any remaining forfeitures shall be used to pay those
expenses of the Plan that are properly payable from the Trust Fund or to reduce
any type(s) of Company Contributions for the Plan Year in which the forfeiture
occurred. Apache shall decide, on behalf of each employer, the amount and
type(s) of Company Contributions or Plan expenses the forfeitures shall reduce.
5.6 Credits for Pre-Lapse Service.
(a) Company Contributions Made After Reemployment.
(i) A Participant who is vested in any portion of his or
her Account, who incurs a one- year Lapse in Apache Employment, and
who is thereafter reemployed, shall receive credit for vesting
purposes for Years of Service prior to a one-year Lapse in Apache
Employment upon completing a Year of Service after such one-year Lapse
in Apache Employment.
(ii) A Participant who is not vested in any portion of his
or her Account, who incurs a one-year Lapse in Apache Employment, and
who is thereafter reemployed, shall receive credit for vesting
purposes for Years of Service prior to a one-year Lapse in Apache
Employment only if (A) the Participant completes a Year of Service
after such Lapse in Apache Employment, and (B) the number of
consecutive one-year Lapses in Apache Employment is less than the
greater of five or the aggregate number of Years of Service before
such lapse.
(b) Company Contributions Made Prior to Termination. Years of
Service after a Participant has incurred five consecutive one-year Lapses in
Apache Employment shall be disregarded in determining the vested percentage in
a Participant's Account at the time of the lapse.
5.7 Transfers - Portability.
If any other employer adopts this or a similar money purchase pension
plan and enters into a reciprocal agreement with the Company that provides that
(a) the transfer of a Participant from such employer to the Company (or vice
versa) shall not be deemed a termination of employment for purposes of the
plans, and (b) service with either or both employers shall be credited for
purposes of vesting under both plans, then the transferred Participant's
Account shall be unaffected by the transfer, except, if deemed advisable by the
Committee, it may be transferred to the trustee of the other plan.
5.8 Reemployment - Separate Account.
If a Participant who is not fully vested terminates employment and
then returns to employment with the Company or an Affiliated Entity before
receiving the entire vested portion of his or her Account, the vested portion
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that has not been distributed shall be held in a separate Account for such
Participant. The Participant shall be fully vested in such Account and no
further Company Contributions shall be allocated to that Account. In all other
respects, such Account shall be treated as a regular Account. A new Account
shall be established to which all appropriate Company Contributions made after
the date of reemployment shall be allocated. If a Participant becomes fully
vested in two or more Accounts, all such amounts shall be merged into one
Account.
ARTICLE VI
DISTRIBUTION OF BENEFITS
6.1 Beneficiaries.
(a) Designating Beneficiaries. Each Account Owner shall file with
the Committee a designation of the beneficiaries and contingent beneficiaries
to whom the distributable amount (determined pursuant to section 6.2) shall be
paid in the event of the Account Owner's death. In the absence of an effective
beneficiary designation as to any portion of the distributable amount after a
Participant dies, such amount shall be paid to the Participant's surviving
Spouse, or, if none, to his or her estate. In the absence of an effective
beneficiary designation as to any portion of the distributable amount after any
non-Participant Account Owner dies, such amount shall be paid to the Account
Owner's estate. A beneficiary designation may be changed by the Account Owner
at any time and without the consent of any previously designated beneficiary.
(b) Special Rule for Married Participants. If the Account Owner
is a married Participant, his or her Spouse shall be the sole beneficiary
unless the Spouse has consented to the designation of a different beneficiary.
To be effective, the Spouse's consent must be in writing, witnessed by a notary
public, and filed with the Committee. The Spouse must also consent to waive
the QPSA with respect to the benefits payable to another beneficiary, as
described in subsection (c). The Spouse cannot revoke his or her consent to
waive the QPSA. Any spousal consent shall be effective only as to the Spouse
who signed the consent.
(c) Waiver of QPSA. In order for the QPSA to be waived, the
Participant must elect to waive the QPSA (which the Participant may do by
naming a beneficiary other than his or her Spouse) and the Spouse must consent
to the Participant's election. The Committee shall provide the Participant
with a written explanation that describes the terms and conditions of the QPSA,
the Participant's right to choose another beneficiary, the rights of the
Participant's Spouse to insist upon a QPSA, and the Participant's right to
revoke his or her election. The Participant may revoke the QPSA waiver at any
time. The written explanation must be provided within the following time
limits. If the Participant terminates employment prior to age 35, the
explanation must be provided within the period beginning one year before and
ending one year after the termination of employment. If the Participant
terminates employment on or after age 35, the explanation must be provided
within the one of the following periods (whichever period ends last): (i) the
period beginning on the first day of the Plan Year in which the Participant
attains age 32 and ending on the last day of the Plan Year in which the
Participant attains age 34; (ii) the period beginning one year before, and
ending one year after, the Participant first becomes eligible to participate in
the Plan; and (iii) the period beginning one year before, and ending one year
after, a married Participant is fully or partially vested in his or her Account
(which will normally occur either when the Participant gets married or when the
Participant completes one Year of Service). If the Participant elects to waive
the QPSA, with the consent of his or her Spouse, before the first day of the
Plan Year in which the Participant attains age 35, the waiver shall become
invalid on the first day of the Plan Year in which the Participant attains age
35.
(d) Special Rule for Divorces. If a Participant has designated
his or her Spouse as his or her beneficiary, and the Participant and that
Spouse subsequently divorce, then the beneficiary designation shall be void and
of no effect on the day such divorce is final.
6.2 Distributable Amount.
The distributable amount of a Participant's Account is the vested
portion of the Account, reduced by any amount that is payable to an Alternate
Payee pursuant to section 12.9. Furthermore, the Committee shall temporarily
suspend or limit distributions (by reducing the distributable amount), as
explained in subsections
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12.9(e) and 12.9(h), (a) when the Committee is informed that a QDRO affecting
the Participant's Accounts is in process or may be in process, or (b) while the
Committee believes that the Plan may have a cause of action against the
Participant.
6.3 Manner of Distribution.
(a) Participants. This subsection shall apply to distributions to
Participants.
(i) Form of Distribution. The distributable amount shall
be paid in the form of either a single payment or a QJSA, except that
a distribution of a small account under subsection 6.4(d) shall be
paid in the form of a single payment. The distribution to a
Participant shall be in the form of a QJSA unless the Participant
elects a single payment and, if the Participant is married, his or her
Spouse consents to the single payment.
(ii) Consent of Participant and Spouse.
(A) General. Except as provided in subparagraph
(B), a distribution shall not be made unless the Participant
consents to the timing of the distribution. If the
Participant is married and chooses a single payment, the
Participant's Spouse must consent to both the form of payment
and the time of the payment, except as provided in
subparagraph (B).
(B) Exceptions to General Rule. The consent of
the Participant is not required, nor is the consent of a
married Participant's Spouse required, for distributions of
small amounts pursuant to subsection 6.4(d) or for the
distribution of an annuity upon the Participant's Required
Beginning Date, as described in subsection 6.4(c).
(iii) Method of Spouse's Consent. The consent of a
Participant's Spouse must be in writing. The consent is not valid
unless the Committee has provided the written explanation described in
paragraph (iv). The Spouse must acknowledge the affect of his or her
consent. The Spouse's consent must be witnessed by a Committee member
or by a notary public.
(iv) Distribution Procedure. The Committee shall provide
the Participant with a written explanation that contains the
information required by the Code and Treasury Regulations. The
information shall include, at a minimum, the terms and conditions of
the QJSA, the Participant's right to elect a single payment in lieu of
a QJSA, the effect of the Participant electing a single payment in
lieu of a QJSA, the right of the Participant's Spouse to insist upon a
QJSA, and the Participant's right to revoke his or her distribution
election. After the Participant receives this information, the
Participant may elect in writing at any time to receive a single
payment or a QJSA. The Committee may process the Participant's
distribution at any time between 8 and 90 days after the Committee
provides the information. The Participant may revoke his or her
election at any time before his or her distribution is processed. If
the distribution is in the form of a QJSA, the first payment shall be
made as soon as administratively practicable.
(b) Beneficiaries. The distributable amount that is left to a
beneficiary shall be paid in the form of a single payment, unless the
beneficiary is the Participant's Spouse and the Participant's Account balance
is greater than $3,500 ($5,000 effective January 1, 1998), in which case the
distributable amount shall be paid, at the election of the surviving Spouse, in
the form of either a single payment or a QPSA.
(c) Alternate Payees. If the Alternate Payee is not the
Participant's Spouse or former spouse, the amount assigned to the Alternate
Payee shall be paid in the form of a single payment. If the Alternate Payee is
the Participant's Spouse or former spouse, then unless the next sentence
applies, the amount assigned to an Alternate
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Payee shall be paid, at the election of the Alternate Payee or as specified in
the QDRO, in the form of either a single payment or an annuity for the life of
the Alternate Payee. If the amount assigned to the Alternate Payee is $3,500
($5,000 effective January 1, 1998) or less (calculated in accordance with the
applicable Treasury regulations), then the Alternate Payee shall receive a
single sum distribution.
(d) Annuities. If the distribution is to be in the form of an
annuity, the Plan shall purchase an annuity contract that satisfies the
requirements specified in the Plan and in Code sections 401(a)(11) and 417, and
shall distribute such contract to the distributee. The payments under an
annuity shall begin as soon as administratively practicable after the annuity
contract is distributed. The payments shall remain constant for the duration
of the annuity, except for a QJSA where the Spouse outlives the Participant, in
which case the payments are halved when the Participant dies.
6.4 Time of Distribution.
(a) Earliest Date of Distribution. Unless an earlier distribution
is permitted by subsection (b) or required by subsection (c), the earliest date
that a Participant may elect to receive a distribution is as follows.
(i) Termination of Employment or Disability. A
Participant may elect to receive a distribution as soon as practicable
after he or she terminates employment or incurs a Disability.
(ii) During Employment. A Participant may obtain a
distribution while an Employee only if he or she has attained Normal
Retirement Age. After Normal Retirement Age, and while an Employee,
the Participant may withdraw all or any portion of his or her Account.
The minimum withdrawal shall be $1,000 or, if less, the balance of the
Account. Only two withdrawals are permitted each Plan Year under this
paragraph. After an Employee's Required Beginning Date, subsection
(c) shall apply instead of this paragraph.
(b) Alternate Earliest Date of Distribution. Notwithstanding
subsection (a), unless a Participant elects otherwise, his or her distribution
shall commence no later than 60 days after the close of the latest of: (i) the
Plan Year in which the Participant attains Normal Retirement Age; (ii) the Plan
Year in which occurs the tenth anniversary of the year in which the Participant
commenced participation in the Plan; and (iii) the Plan Year in which the
Participant terminates employment with the Company and Affiliated Entities. If
a Participant does not affirmatively elect a distribution, he or she shall be
deemed to have elected to defer the distribution to a date later than that
specified in the preceding sentence.
(c) Latest Date of Distribution. The entire distributable amount
shall be distributed (i) in a single payment not later than the Required
Beginning Date, or (ii) in the form of an annuity with payments beginning no
later than the Required Beginning Date. The terms of the annuity shall comply
with the applicable Treasury Regulations. The payment will be in the form of
an annuity unless the Participant elects a single payment and, if the
Participant is married, his or her Spouse consents to the single payment.
(d) Small Amounts. If the aggregate value of the nonforfeitable
portion of a Participant's Account is $3,500 ($5,000 effective January 1, 1998)
or less (calculated in accordance with the applicable Treasury regulations)
upon the Participant's termination of employment, then the Participant shall
receive a single sum distribution as soon as practicable in the calendar year
after the calendar year in which the Participant terminated employment.
(e) Distribution Upon Participant's Death. If the aggregate cash
value of the nonforfeitable portion of the Participant's Account is $3,500
($5,000 effective January 1, 1998) or less (calculated in accordance with
applicable Treasury regulations), each beneficiary shall receive a single
payment as soon as administratively practicable after the Participant's death.
Otherwise, the beneficiary may elect to have the distributable amount
distributed at any time before the end of the calendar year containing the
fifth anniversary of the Participant's death, unless the beneficiary is the
Participant's Spouse, in which case the surviving Spouse may elect to defer
distribution until the end of the calendar year in which the Participant would
have attained age 70-1/2, or, if later,
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the end of the calendar year containing the first anniversary of the
Participant's death. If the surviving Spouse makes such an election but dies
before receiving the entire distributable amount, then the remaining amount
shall be paid to the beneficiary of the surviving Spouse in a single payment as
soon as administratively practicable after the surviving Spouse's death.
(f) Alternate Payee. Distributions to Alternate Payees and their
beneficiaries shall be made as specified in section 12.9.
6.5 Direct Rollover Election.
(a) General Rule. A Participant, an Alternate Payee who is the
Spouse or former Spouse of the Participant, or a surviving Spouse of a deceased
Participant (collectively, the "distributee") may direct the Trustee to pay all
or any portion of his or her "eligible rollover distribution" to an "eligible
retirement plan" in a "direct rollover." Within a reasonable period of time
before an eligible rollover distribution, the Committee shall inform the
distributee of this direct rollover option, the appropriate withholding rules,
other rollover options, the options regarding income taxation, and any other
information required by Code section 402(f).
(b) Definition of Eligible Rollover Distribution. For purposes of
this section only, an "eligible rollover distribution" is any distribution or
in-service withdrawal other than (i) distributions required under Code section
401(a)(9), (ii) distributions of amounts that have already been subject to
federal income tax (such as defaulted loans or after-tax voluntary
contributions), (iii) installment payments in a series of substantially equal
payments made at least annually and (A) made over a specified period of ten or
more years, (B) made for the life or life expectancy of the distributee, or (C)
made for the joint life or joint life expectancy of the distributee and his or
her designated beneficiary, (iv) a distribution to satisfy the limits of Code
section 415 or 402(g), or (v) any other actual or deemed distribution specified
in the regulations issued under Code section 402(c).
(c) Definition of Eligible Retirement Plan. For purposes of this
section only, (i) for a Participant or an Alternate Payee who is the Spouse or
former Spouse of the Participant, an "eligible retirement plan" is an
individual retirement account or annuity described in Code section 408(a) or
408(b), an annuity plan described in Code section 403(a), or the qualified
trust of a defined contribution plan that accepts eligible rollover
distributions, and (ii) for a surviving Spouse of a deceased Participant, an
"eligible retirement plan" is an individual retirement account or annuity.
(d) Definition of Direct Rollover. For purposes of this section
only, a "direct rollover" is a payment by the Trustee to the eligible
retirement plan specified by the distributee.
ARTICLE VII
ALLOCATION OF RESPONSIBILITIES - NAMED FIDUCIARIES
7.1 No Joint Fiduciary Responsibilities.
The Trustee(s) and the Committee shall be the named fiduciaries under
the Plan and Trust agreement and shall be the only named fiduciaries
thereunder. The fiduciaries shall have only the responsibilities specifically
allocated to them herein or in the Trust agreement. Such allocations are
intended to be mutually exclusive and there shall be no sharing of fiduciary
responsibilities. Whenever one named fiduciary is required by the Plan or
Trust agreement to follow the directions of another named fiduciary, the two
named fiduciaries shall not be deemed to have been assigned a shared
responsibility, but the responsibility of the named fiduciary giving the
directions shall be deemed his or her sole responsibility, and the
responsibility of the named fiduciary receiving those directions shall be to
follow them insofar as the instructions are on their face proper under
applicable law.
7.2 The Company.
The Company shall be responsible for: (a) making Company
Contributions; (b) certifying to the Trustee the names and specimen signatures
of the members of the Committee acting from time to time; (c) keeping
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accurate books and records with respect to its Employees and the appropriate
components of each Employee's Compensation and furnishing such data to the
Committee; (d) selecting agents and fiduciaries to operate and administer the
Plan and Trust; (e) appointing an investment manager if it determines that one
should be appointed; and (f) reviewing periodically the performance of such
agents, managers, and fiduciaries.
7.3 The Trustee.
The Trustee shall be responsible for: (a) the investment of the Trust
Fund to the extent and in the manner provided in the Trust agreement; (b) the
custody and preservation of Trust assets delivered to it; and (c) the payment
of such amounts from the Trust Fund as the Committee shall direct.
7.4 The Committee - Plan Administrator.
The Board of Directors of Apache (the "Board") shall appoint an
administrative Committee consisting of no fewer than three individuals who may
be, but need not be, Participants, officers, directors, or Employees of the
Company. If the Board does not appoint a Committee, Apache shall act as the
Committee under the Plan. The members of the Committee shall hold office at
the pleasure of the Board and shall service without compensation. The
Committee shall be the "Plan administrator" as defined in section 3(16)(A) of
ERISA. It shall be responsible for establishing and implementing a funding
policy consistent with the objectives of the Plan and with the requirements of
ERISA. This responsibility shall include establishing (and revising as
necessary) short-term and long-term goals and requirements pertaining to the
financial condition of the Plan, communicating such goals and requirements to
the persons responsible for the various aspects of the Plan operations, and
monitoring periodically the implementation of such goals and requirements.
7.5 Committee to Construe Plan.
(a) The Committee shall administer the Plan and shall have all
discretion, power, and authority necessary for that purpose, including, but not
by way of limitation, the full and absolute discretion and power to interpret
the Plan, to determine the eligibility, status, and rights of all individuals
under the Plan, and in general to decide any dispute and all questions arising
in connection with the Plan. The Committee shall direct the Trustee concerning
all distributions from the Trust Fund, including the purchase of annuity
contracts, in accordance with the provisions of the Plan, and shall have such
other powers in the administration of the Trust Fund as may be conferred upon
it by the Trust agreement. The Committee shall maintain all Plan records
except records of the Trust Fund.
(b) The Committee may adjust the Account of any Participant, in
order to correct errors and rectify omissions, in such manner as the Committee
believes will best result in the equitable and nondiscriminatory administration
of the Plan.
7.6 Organization of Committee.
The Committee shall adopt such rules as it deems desirable for the
conduct of its affairs and for the administration of the Plan. It may appoint
agents (who need not be members of the Committee) to whom it may delegate such
powers as it deems appropriate, except that any dispute shall be determined by
the Committee. The Committee may make its determinations with or without
meetings. It may authorize one or more of its members or agents to sign
instructions, notices, and determinations on its behalf. The action of a
majority of the Committee shall constitute the action of the Committee.
7.7 Interested Committee Members.
If a Committee decision or action affects a small number of
Participants including a Committee member, then such Committee member shall not
participate in the Committee decision or action. The action of a majority of
the disinterested Committee members shall constitute the action of the
Committee.
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7.8 Agent for Process.
Apache's Vice President, General Counsel, and Secretary shall be the
agents of the Plan for service of all process.
7.9 Indemnification of Committee Members.
The Company shall indemnify and hold the members of the Committee, and
each of them, harmless from the effects and consequences of their acts,
omissions, and conduct in their official capacities, except to the extent that
the effects and consequences thereof shall result from their own willful
misconduct, breach of good faith, or gross negligence in the performance of
their duties. The foregoing right of indemnification shall not be exclusive of
the rights to which each such member may be entitled as a matter of law.
7.10 Conclusiveness of Action.
Any action taken by the Committee on matters within the discretion of
the Committee shall be conclusive, final and binding upon all participants in
the Plan and upon all persons claiming any rights hereunder, including
Alternate Payees and beneficiaries.
7.11 Payment of Expenses.
The members of the Committee shall serve without compensation but
their reasonable expenses shall be paid by the Company. The compensation or
fees of accountants, counsel, and other specialists and any other costs of
administering the Plan or Trust Fund may be charged to the Trust Fund, to the
extent permissible under the provisions of ERISA.
ARTICLE VIII
TRUST AGREEMENT - INVESTMENTS
8.1 Trust Agreement.
Apache has entered into a Trust agreement to provide for the holding,
investment, and administration of the funds of the Plan. The Trust agreement
shall be part of the Plan, and the rights and duties of any individual under
the Plan shall be subject to all terms and provisions of the Trust agreement.
8.2 Expenses of Trust.
(a) Except as provided in subsection (b) below, all taxes upon or
in respect of the Trust shall be paid by the Trustee out of the Trust assets,
and all expenses of administering the Trust shall be paid by the Trustee out of
the Trust assets, to the extent such taxes and expenses are not paid by the
Company or the Account Owner. No fiduciary shall receive any compensation for
services rendered to the Plan if the fiduciary is being compensated on a
full-time basis by the Company.
(b) To the extent not paid by the Company, all expenses of
individually directed transactions in Trust assets, including without
limitation the Trustee's transaction fee, brokerage commissions, transfer
taxes, interest on insurance policy loans, and any taxes and penalties that may
be imposed as a result of an individual's investment direction, shall be
assessed against the Account of the Account Owner directing such transactions.
8.3 Investments.
(a) Section 404(c) Plan. The Plan is intended to be a plan
described in ERISA section 404(c). To the extent that an Account Owner
exercises control over the investment of his or her Accounts, no person who is
a
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fiduciary shall be liable for any loss, or by reason of any breach, that is the
direct and necessary result of the Account Owner's exercise of control.
(b) Directed Investments. Accounts shall be invested, upon the
written or telephone voice-response direction of each Account Owner, in any one
or more of a series of investment funds designated by the Committee from time
to time. The funds available for investment and the principal features
thereof, including a general description of the investment objectives, the risk
and return characteristics, and the type and diversification of the investment
portfolio of each fund, shall be communicated to the Account Owners in the Plan
from time to time. Any changes in such funds shall be immediately communicated
to all Account Owners.
(c) Absence of Directions. To the extent that an Account Owner
fails to affirmatively direct the investment of his or her Accounts, the
Committee shall direct the Trustee in writing concerning the investment of such
Accounts. The Committee shall act by majority vote. Any dissenting member of
the Committee shall, having registered his or her dissent in writing,
thereafter cooperate to the extent necessary to implement the decision of the
Committee.
(d) Change in Investment Directions. Account Owners may change
their investment directions, with respect to the investment of new
contributions and with respect to the investment of existing amounts allocated
to Accounts, on any business day. The Committee shall establish procedures for
giving investment directions, which shall be in writing and communicated to
Account Owners.
ARTICLE IX
TERMINATION AND AMENDMENT
9.1 Termination of Plan or Discontinuance of Contributions.
Apache expects to continue the Plan indefinitely, but the continuance
of the Plan and the payment of contributions are not assumed as contractual
obligations. Apache may terminate the Plan or discontinue contributions at any
time. Upon the termination of the Plan, each Participant's Account shall
become fully vested. Upon the partial termination of the Plan, the Accounts of
all affected Participants shall become fully vested. The only Participants who
are affected by a partial termination are those whose employment with the
Company or Affiliated Entity is terminated as a result of the corporate event
causing the partial termination; Employees terminated for cause are not
affected by a partial termination.
9.2 Allocations upon Termination.
Upon the termination or partial termination of the Plan, the Committee
shall promptly notify the Trustee of such termination. The Trustee shall
promptly determine, in the manner prescribed in section 4.2, the net worth of
the Trust Fund. The Trustee shall advise the Committee of any increase or
decrease in such net worth that has occurred since the preceding Valuation
Date. The Committee shall allocate, in the manner described in section 4.3,
among the remaining Plan Accounts, in the manner described in Articles III, IV,
and V, any Company Contributions or forfeitures occurring since the preceding
Valuation Date.
9.3 Procedure Upon Termination of Plan.
If the Plan has been terminated or partially terminated, then, after
the allocations required under section 9.2 have been completed, the Trustee
shall distribute or transfer the Accounts of affected Employees as follows.
(a) If the affected Employee's Account has an aggregate value of
$3,500 ($5,000 effective January 1, 1998) or less (calculated in accordance
with applicable Treasury regulations), then the Trustee shall distribute the
Employee's Account to the Employee in a single payment.
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(b) If the affected Employee's Account has a value of more than
$3,500 ($5,000 effective January 1, 1998) (calculated in accordance with
applicable Treasury regulations), then the Trustee shall distribute the
Employee's Account to the Employee in either a single payment or a QJSA.
(c) In lieu of distributing Accounts under subsections (a) or (b),
the Company may direct the Trustee to transfer the Employee's Account to
another qualified defined contribution plan maintained by the Company or an
Affiliated Entity.
Any distribution or transfer made pursuant to this section shall be in cash.
After all such distributions or transfers have been made, the Trustee shall be
discharged from all obligation under the Trust; no Participant, Spouse,
Alternate Payee, or beneficiary who has received any such distribution, or for
whom any such transfer has been made, shall have any further right or claim
under the Plan or Trust.
9.4 Amendment by Apache.
Apache may at any time amend the Plan in any respect, without prior
notice, subject to the following limitations. No amendment shall be made that
would have the effect of vesting in the Company any part of the Trust Fund or
of diverting any part of the Trust Fund to purposes other than for the
exclusive benefit of Account Owners. The rights of any Account Owner with
respect to contributions previously made shall not be adversely affected by any
amendment. No amendment shall reduce or restrict, either directly or
indirectly, the accrued benefit (within the meaning of Code section 411(d)(6))
of any Account Owner before the amendment, except as permitted by the Internal
Revenue Service.
If the vesting schedule is amended, each Participant with at least
three Years of Service may elect, within the period specified in the following
sentence after the adoption of the amendment, to have his or her nonforfeitable
percentage computed under the Plan without regard to such amendment. The
period during which the election may be made shall commence with the date the
amendment is adopted and shall end on the latest of: (a) 60 days after the
amendment is adopted; (b) 60 days after the amendment becomes effective; or (c)
60 days after the Participant is issued written notice of the amendment by the
Company or Committee. Furthermore, no amendment shall decrease the
nonforfeitable percentage, measured as of the later of the date the amendment
is adopted or effective, of any Account Owner's Account.
Each amendment shall be in writing. Each amendment shall be approved
by Apache's Board of Directors (the "Board") or by an officer of Apache who is
authorized by the Board to amend the Plan. Each amendment shall be executed by
an officer of Apache to whom the Board has delegated the authority to execute
the amendment.
ARTICLE X
PLAN ADOPTION BY AFFILIATED ENTITIES
10.1 Adoption of Plan.
Apache may permit any Affiliated Entity to adopt the Plan and Trust
for its Employees. Thereafter, such Affiliated Entity shall deliver to the
Trustee a certified copy of the resolutions or other documents evidencing its
adoption of the Plan and Trust.
10.2 Agent of Affiliated Entity.
By becoming a party to the Plan, each Affiliated Entity appoints
Apache as its agent with authority to act for the Affiliated Entity in all
transactions in which Apache believes such agency will facilitate the
administration of the Plan. Apache shall have the sole authority to amend and
terminate the Plan.
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10.3 Disaffiliation and Withdrawal from Plan.
(a) Disaffiliation. Any Affiliated Entity that has adopted the
Plan and thereafter ceases for any reason to be an Affiliated Entity shall
forthwith cease to be a party to the Plan.
(b) Withdrawal. Any Affiliated Entity may, by appropriate action
and written notice thereof to Apache, provide for the discontinuance of its
participation in the Plan. Such withdrawal from the Plan shall not be
effective until the end of the Plan Year.
10.4 Effect of Disaffiliation or Withdrawal.
If at the time of disaffiliation or withdrawal, the disaffiliating or
withdrawing entity, by appropriate action, adopts a substantially identical
plan that provides for direct transfers from this Plan, then, as to employees
of such entity, no plan termination shall have occurred; the new plan shall be
deemed a continuation of this Plan for such employees. In such case, the
Trustee shall transfer to the trustee of the new plan all of the assets held
for the benefit of employees of the disaffiliating or withdrawing entity, and
no forfeitures or acceleration of vesting shall occur solely by reason of such
action. Such payment shall operate as a complete discharge of the Trustee, and
of all organizations except the disaffiliating or withdrawing entity, of all
obligations under this Plan to employees of the disaffiliating or withdrawing
entity and to their beneficiaries. A new plan shall not be deemed
substantially identical to this Plan if it provides slower vesting than this
Plan. Nothing in this section shall authorize the divesting of any vested
portion of a Participant's Account.
10.5 Distribution Upon Disaffiliation or Withdrawal.
(a) Disaffiliation. If an entity disaffiliates from Apache and
the provisions of section 10.4 are not followed, then the following rules apply
to the Account of employees of the disaffiliating entity. If the
disaffiliating entity maintains a defined contribution plan, and that plan will
accept a direct transfer from this Plan, the Company may direct the Trustee to
transfer the employee's Account to the other plan. Otherwise, the employee's
Account shall remain in this Plan, and Article VI will govern the distribution
of such Account.
(b) Withdrawal. If an Affiliated Entity withdraws from the Plan
and the provisions of section 10.4 are not followed, then the following rules
apply to the Accounts of Employees of the withdrawing entity. If the
withdrawing entity maintains a defined contribution plan, and that plan will
accept a direct transfer from this Plan, the Company may direct the Trustee to
transfer the Employee's Account to the other plan. Otherwise, the Employee's
Account shall remain in this Plan, and Article VI will govern the distribution
of such Account.
ARTICLE XI
TOP-HEAVY PROVISIONS
11.1 Application of Top-Heavy Provisions.
The provisions of this Article XII shall be applicable only if the
Plan becomes "top-heavy" as defined below for any Plan Year. If the Plan
becomes "top-heavy" as of the Determination Date for a Plan Year, the
provisions of this Article XII shall apply to the Plan effective as of the
first day of such Plan Year and shall continue to apply to the Plan until the
Plan ceases to be "top-heavy" or until the Plan is terminated or otherwise
amended.
11.2 Determination of Top-Heavy Status.
The Plan shall be considered "top-heavy" for a Plan Year if, as of the
Determination Date for that Plan Year, the aggregate of the Account balances
(as calculated according to the regulations under Code section 416) of Key
Employees under this Plan (and under all other plans required or permitted to
be aggregated with this Plan) exceeds 60% of the aggregate of the Account
balances (as calculated according to the regulations under Code section 416) in
this Plan (and under all other plans required or permitted to be aggregated
with this Plan) of all
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current Employees and all former Employees who terminated employment within
five years of the Determination Date. This ratio shall be referred to as the
"top-heavy ratio". For purposes of determining the Account balance of any
Participant, distributions made with respect to such individual within a
five-year period ending on the Determination Date shall be included. This
shall also apply to distributions under a terminated plan that, if it had not
been terminated, would have been required to be included in an aggregation
group. The Account balances of a Participant who had once been a Key Employee,
but who is not a Key Employee during the Plan Year, shall not be taken into
account. The following plans must be aggregated with this Plan for the
top-heavy test: (a) a qualified plan maintained by the Company or an
Affiliated Entity in which a Key Employee participated during this Plan Year or
during the previous four Plan Years and (b) any other qualified plan maintained
by the Company or an Affiliated Entity that enables this Plan or any plan
described in clause (a) to meet the requirements of Code sections 401(a)(4) or
410. The following plans may be aggregated with this Plan for the top-heavy
test: any qualified plan maintained by the Company or an Affiliated Entity
that, in combination with the Plan or any plan required to be aggregated with
this Plan when testing this Plan for top- heaviness, would satisfy the
requirements of Code sections 401(a)(4) and 410. If one or more of the plans
required or permitted to be aggregated with this Plan is a defined benefit
plan, a Participant's "account balance" shall equal the present value of his or
her accrued benefit, including any distributions within five years of the
Determination Date. If the aggregation group includes more than one defined
benefit plan, the same actuarial assumptions shall be used with respect to each
such defined benefit plan. The foregoing top-heavy ratio shall be computed in
accordance with the provisions of Code section 416(g), together with the
regulations and rulings thereunder.
11.3 Special Vesting Rule.
Unless section 5.1 provides for faster vesting, the amount credited to
the Participant's Account shall vest in accordance with the following schedule
during any top-heavy Plan Year:
Completed Years of Service Vested Percentage
-------------------------- -----------------
fewer than 2 0%
2 20%
3 40%
4 60%
5 80%
6 or more 100%
11.4 Special Minimum Contribution.
Notwithstanding the provisions of section 3.1 and Article IV to the
contrary, in every top-heavy Plan Year, a minimum allocation is required for
each Non-Key Employee who both (a) performed one or more Hours of Service
during the Plan Year as a Covered Employee after satisfying any eligibility
requirement of section 2.1, and (b) was an Employee on the last day of the Plan
Year. The minimum allocation shall be a percentage of each Non-Key Employee's
Compensation. The percentage shall be the lesser of 3% or the largest
percentage obtained for any Key Employee by dividing his or her Annual
Additions (to this Plan and any other plan aggregated with this Plan) for the
Plan Year by his or her Compensation for the Plan Year. If the Participant
participates in both this Plan and the Apache Corporation 401(k) Savings Plan,
then the Participant's minimum allocation to this Plan shall be reduced by any
allocation of "Company Discretionary Contributions" or forfeitures treated as
Company Discretionary Contributions that he or she receives in that plan for
the Plan Year.
11.5 Change in Top-Heavy Status.
If the Plan ceases to be a "top-heavy" plan as defined in this Article
XII, and if any change in the benefit structure, vesting schedule, or other
component of a Participant's accrued benefit occurs as a result of such change
in top-heavy status, the nonforfeitable portion of each Participant's benefit
attributable to Company Contributions shall not be decreased as a result of
such change. In addition, each Participant with at least three Years of
Service with the Company and Affiliated Entities on the date of such change,
may elect to have the nonforfeitable
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percentage computed under the Plan without regard to such change in status.
The period during which the election may be made shall commence on the date the
Plan ceases to be a top-heavy plan and shall end on the later of (a) 60 days
after the change in status occurs, (b) 60 days after the change in status
becomes effective, or (c) 60 days after the Participant is issued written
notice of the change by the Company or the Committee.
ARTICLE XII
MISCELLANEOUS
12.1 RIGHT TO DISMISS EMPLOYEES - NO EMPLOYMENT CONTRACT.
THE COMPANY AND AFFILIATED ENTITIES MAY TERMINATE THE EMPLOYMENT OF
ANY EMPLOYEE AS FREELY AND WITH THE SAME EFFECT AS IF THIS PLAN WERE NOT IN
EXISTENCE. PARTICIPATION IN THIS PLAN BY AN EMPLOYEE SHALL NOT CONSTITUTE AN
EXPRESS OR IMPLIED CONTRACT OF EMPLOYMENT BETWEEN THE COMPANY OR AN AFFILIATED
ENTITY AND THE EMPLOYEE.
12.2 Claims Procedure.
(a) All claims shall be filed by the Participant, the
Participant's beneficiary, or the authorized representative of the claimant, by
completing any procedures that the Committee requires. These procedures shall
be reasonable and may include the completion of forms and the submission of
documents and additional information.
(b) The Committee shall review all materials and shall decide
whether to approve or deny the claim. If a claim is denied in whole or in
part, written notice of denial shall be furnished by the Committee to the
claimant within 90 days after the receipt of the claim by the Committee, unless
special circumstances require an extension of time for processing the claim, in
which event notification of the extension shall be provided to the claimant and
the extension shall not exceed 90 days. The written notice shall set forth the
specific reasons for such denial, specific reference to pertinent Plan
provisions, a description of any additional material or information necessary
for the claimant to perfect the claim and an explanation of why such material
or information is necessary, all written in a manner calculated to be
understood by the claimant. The notice shall include appropriate information
as to the steps taken if the claimant wishes to submit the denied claim for
review. The claimant may request a review upon written application, may review
pertinent documents, and may submit issues or comments in writing. The
claimant must request a review within the reasonable period of time prescribed
by the Committee. In no event shall such a period of time be less than 60
days. The Committee shall decide all reviews of denied claims. A decision on
review shall be rendered within 60 days of the receipt of request for review by
the Committee. If special circumstances require a further extension of time
for processing, a decision shall be rendered not later than 120 days following
the Committee's receipt of the request for review. If such an extension of
time for review is required, written notice of the extension shall be furnished
to the claimant prior to the commencement of the extension. The Committee's
decision on review shall be furnished to the claimant. Such decision shall be
in writing and shall include specific reasons for the decision, written in a
manner calculated to be understood by the claimant, as well as specific
references to the pertinent Plan provisions on which the decision is based.
(c) The Committee shall have total discretionary authority to
determine eligibility, status, and the rights of all individuals under the Plan
and to construe any and all terms of the Plan.
12.3 Source of Benefits.
All benefits payable under the Plan shall be paid solely from the
Trust Fund, and the Company and Affiliated Entities assume no liability or
responsibility therefor.
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12.4 Exclusive Benefit of Employees.
It is the intention of the Company that no part of the Trust, other
than as provided in sections 3.3, 8.2, and 12.9 hereof and the Trust Agreement,
ever to be used for or diverted for purposes other than for the exclusive
benefit of Participants, Alternate Payees, and their beneficiaries, and that
this Plan shall be construed to follow the spirit and intent of the Code and
ERISA.
12.5 Forms of Notices.
Wherever provision is made in the Plan for the filing of any notice,
election, or designation by a Participant, Spouse, Alternate Payee, or
beneficiary, the action of such individual may be evidenced by the execution of
such form as the Committee may prescribe for the purpose. The Committee may
also prescribe alternate methods for filing any notice, election, or
designation (such as telephone voice-response or e-mail).
12.6 Failure of Any Other Entity to Qualify.
If any entity adopts this Plan but fails to obtain or retain the
qualification of the Plan under the applicable provisions of the Code, such
entity shall withdraw from this Plan upon a determination by the Internal
Revenue Service that it has failed to obtain or retain such qualification.
Within 30 days after the date of such determination, the assets of the Trust
Fund held for the benefit of the Employees of such entity shall be separately
accounted for and disposed of in accordance with the Plan and Trust.
12.7 Notice of Adoption of the Plan.
The Company shall provide each of its Employees with notice of the
adoption of this Plan, notice of any amendments to the Plan, and notice of the
salient provisions of the Plan prior to the end of the first Plan Year. A
complete copy of the Plan shall also be made available for inspection by
Employees or any Account Owner.
12.8 Plan Merger.
If this Plan is merged or consolidated with, or its assets or
liabilities are transferred to, any other qualified plan of deferred
compensation, each Participant shall be entitled to receive a benefit
immediately after the merger, consolidation, or transfer that is equal to or
greater than the benefit the Participant would have been entitled to receive
immediately before the merger, consolidation, or transfer if this Plan had then
been terminated.
12.9 Inalienability of Benefits - Domestic Relations Orders.
(a) Except as provided in subsections (b) and (g) below, no
Participant or beneficiary shall have any right to assign, alienate, transfer,
or encumber his or her interest in any benefits under this Plan, nor shall such
benefits be subject to any legal process to levy upon or attach the same for
payment of any claim against any such Participant or beneficiary.
(b) Subsection (a) shall apply to the creation, assignment, or
recognition of a right to any benefit payable with respect to a Participant
pursuant to a Domestic Relations Order unless such Domestic Relations Order is
a QDRO, in which case the Plan shall make payment of benefits in accordance
with the applicable requirements of any such QDRO.
(c) In order to be a QDRO, the Domestic Relations Order must
satisfy the requirements of Code section 414(p) and ERISA section 206(d)(3).
In particular, the Domestic Relations Order: (i) must specify the name and the
last known mailing address of the Participant; (ii) must specify the name and
mailing address of each Alternate Payee covered by the order; (iii) must
specify either the amount or percentage of the Participant's benefits to be
paid by the Plan to each such Alternate Payee, or the manner in which such
amount or percentage is to be determined; (iv) must specify the number of
payments or period to which such order applies; (v) must specify each plan to
which such order applies; (vi) may not require the Plan to provide any type or
form of benefit, or any
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option, not otherwise provided under the Plan, subject to the provisions of
subsection (f); (vii) may not require the Plan to provide increased benefits
(determined on the basis of actuarial value); and (viii) may not require the
payment of benefits to an Alternate Payee if such benefits have already been
designated to be paid to another Alternate Payee under another order previously
determined to be a QDRO.
(d) In the case of any payment before an Employee has separated
from service, a Domestic Relations Order shall not be treated as failing to
meet the requirements of subsection (c) solely because such order requires that
payment of benefits be made to an Alternate Payee (i) on or after the dates
specified in subsection (f), (ii) as if the Employee had retired on the date on
which such payment is to begin under such order (but taking into account only
the Account balance on such date), and (iii) in any form in which such benefits
may be paid under the Plan to the Employee. For purposes of this subsection,
the Account balance as of the date specified in the QDRO shall be the vested
portion of the Employee's Account on such date.
(e) The Committee shall establish reasonable procedures to
determine the qualified status of Domestic Relations Orders and to administer
distributions under QDROs. Such procedures shall be in writing and shall
permit an Alternate Payee to designate a representative to receive copies of
notices. The Committee shall temporarily suspend distributions and withdrawals
from the Participant's Accounts, except to the extent necessary to make the
required minimum distributions under Code section 401(a)(9), when the Committee
receives a Domestic Relations Order or a draft of such an order that affects
the Participant's Accounts or when one or the following individuals informs the
Committee, orally or in writing, that a QDRO is in process or may be in
process: the Participant, a prospective Alternate Payee, or counsel for the
Participant or a prospective Alternate Payee. The Committee shall promulgate
reasonable and non- discriminatory rules regarding such suspensions, including
but not limited to how long such suspensions remain in effect. However, the
Participant may receive such distributions and withdrawals from the Plan,
subject to the rules of Article VI, as are consented to in writing by all
prospective Alternate Payees identified in the Domestic Relations Order or, in
the absence of a Domestic Relations Order, as are consented to in writing by
the prospective Alternate Payee(s) who informed the Committee that a QDRO was
in process or may be in process. When the Committee receives a Domestic
Relations Order it shall promptly notify the Participant and each Alternate
Payee of such receipt and provide them with copies of the Plan's procedures for
determining the qualified status of the order. Within a reasonable period
after receipt of a Domestic Relations Order, the Committee shall determine
whether such order is a QDRO and notify the Participant and each Alternate
Payee of such determination. During any period in which the issue of whether a
Domestic Relations Order is a QDRO is being determined (by the Committee, by a
court of competent jurisdiction, or otherwise), the Committee shall separately
account for the amounts payable to the Alternate Payee if the order is
determined to be a QDRO. If the order (or modification thereof) is determined
to be a QDRO within 18 months after the date the first payment would have been
required by such order, the Committee shall pay the amounts separately
accounted for (plus any interest thereon) to the individual(s) entitled
thereto. However, if the Committee determines that the order is not a QDRO, or
if the issue as to whether such order is a QDRO has not been resolved within 18
months after the date of the first payment would have been required by such
order, then the Committee shall pay the amounts separately accounted for (plus
any interest thereon) to the individual(s) who would have been entitled to such
amounts if there had been no order. Any determination that an order is a QDRO
that is made after the close of the 18-month period shall be applied
prospectively only. If the Plan's fiduciaries act in accordance with fiduciary
provision of ERISA in treating a Domestic Relations Order as being (or not
being) a QDRO or in taking action in accordance with this subsection, then the
Plan's obligation to the Participant and each Alternate Payee shall be
discharged to the extent of any payment made pursuant to the acts of such
fiduciaries.
(f) The Alternate Payee shall have the following rights under the
Plan:
(i) An Alternate Payee shall receive a distribution of
his or her vested Plan assets as soon as administratively practicable
after the date specified in the QDRO. An Alternate Payee may elect
(or the QDRO may specify) distribution as soon as administratively
practicable after the Domestic Relations Order is determined to be a
QDRO, even if the Participant is not then eligible to receive a
distribution from the Plan. Notwithstanding the above, if the vested
amount assigned to the Alternate Payee is $3,500 ($5,000 effective
January 1, 1998) or less (calculated in accordance with the applicable
Treasury regulations), then the Alternate Payee shall receive a
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single sum distribution of the vested amount as soon as
administratively practicable after the order is determined to be a
QDRO.
(ii) If the amount assigned to an Alternate Payee is not
fully vested, then the Plan will distribute the vested portion
pursuant to paragraph (i) and shall retain the unvested portion in the
Alternate Payee's Account. The unvested portion shall remain in the
Alternate Payee's Account until the Participant terminates employment,
at which time the unvested portion shall be forfeited. When the
vested percentage increases, the newly vested portion shall be
distributed as elected by the Alternate Payee or specified by the
QDRO. Notwithstanding the above, if the vested Account balance is
$3,500 ($5,000 effective January 1, 1998) or less and the vested
Account balance at the time of any prior distributions was also less
than $3,500 ($5,000 effective January 1, 1998), then the Alternate
Payee shall receive a single sum distribution of the vested amount as
soon as administratively practicable after the order is determined to
be a QDRO.
(iii) Upon the Alternate Payee's death, his or her interest
in the Plan shall be distributed as soon as practicable to the
Alternate Payee's beneficiary, as determined in subsection 6.1(a).
(iv) Distribution to an Alternate Payee must begin on or
before the Participant's Required Beginning Date, unless the Committee
determines the Domestic Relations Order is a QDRO after the
Participant's Required Beginning Date, in which case distribution to
the Alternate Payee shall occur as quickly as administratively
practicable.
(v) The Alternate Payee may bring claims against the Plan
in the same manner as a Participant pursuant to section 12.2.
(g) Subsection (a) shall not apply to any offset of a
Participant's benefits against an amount that the Participant is ordered or
required to pay to the Plan if the following conditions are met.
(i) The order or requirement to pay must arise (A) under
a judgment of conviction for a crime involving the Plan, (B) under a
civil judgment (including a consent order or decree) entered by a
court in an action brought in connection with a violation (or alleged
violation) of part 4 of subtitle B of title I of ERISA, or (C)
pursuant to a settlement agreement between the Secretary of Labor and
the Participant, or a settlement agreement between the Pension Benefit
Guaranty Corporation and the Participant, in connection with a
violation (or alleged violation) of part 4 of subtitle B of title I of
ERISA by a fiduciary or any other person.
(ii) The judgment, order, decree, or settlement agreement
must expressly provide for the offset of all or part of the amount
ordered or required to be paid to the Plan against the Participant's
benefits provided under the Plan.
(iii) If the Participant is married at the time at which
the offset is to be made, (A) either the Participant's Spouse must
have already waived his or her right to a QPSA and QJSA or the
Participant's Spouse must consent in writing to such offset with such
consent witnessed by a notary public or representative of the Plan (or
it is established to the satisfaction of a Plan representative that
such consent may not be obtained by reason of circumstances described
in Code section 417(a)(2)(B)), or (B) the Participant's Spouse is
ordered or required in such judgment, order, decree, or settlement to
pay an amount to the Plan in connection with a violation of part 4 of
subtitle B of title I of ERISA, or (C) in such judgment, order,
decree, or settlement, the Participant's Spouse retains the right to
receive a survivor annuity under a qualified joint and survivor
annuity pursuant to Code section 401(a)(11)(A)(i) and under a
qualified preretirement survivor annuity provided pursuant to Code
section 401(a)(11)(A)(ii). The value of the Spouse's survivor annuity
in subparagraph (C) shall be determined as if the Participant
terminated employment on the date of the offset, there was no offset,
the Plan
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permitted commencement of benefits only on or after Normal Retirement
Age, the Plan provided only the "minimum- required qualified joint and
survivor annuity," and the amount of the qualified preretirement
survivor annuity under the Plan is equal to the amount of the survivor
annuity payable under the "minimum-required qualified joint and
survivor annuity." For purposes of this paragraph only, the
"minimum-required qualified joint and survivor annuity" is the
qualified joint and survivor annuity which is the actuarial equivalent
of the Participant's accrued benefit (within the meaning of Code
section 411(a)(7)) and under which the survivor annuity is 50% of the
amount of the annuity which is payable during the joint lives of the
Participant and his or her Spouse.
(h) The Committee shall temporarily suspend distributions and
withdrawals from a Participant's Accounts, except to the extent necessary to
make the required minimum distributions under Code section 401(a)(9), when the
Committee has reason to believe that the Plan may be entitled to an offset of
the Participant's benefits described in subsection (g). The Committee shall
promulgate reasonable and non-discriminatory rules regarding such suspensions,
including but not limited to how long such suspensions remain in effect.
12.10 Payments Due Minors or Incapacitated Individuals.
If any individual entitled to payment under the Plan is a minor, the
Committee shall cause the payment to be made to the custodian or representative
who, under the state law of the minor's domicile, is authorized to receive
funds on behalf of the minor. If any individual entitled to payment under this
Plan has been legally adjudicated to be mentally incompetent or incapacitated,
the Committee shall cause the payment to be made to the custodian or
representative who, under the state law of the incapacitated individual's
domicile, is authorized to receive funds on behalf of the incapacitated
individual. Payments made pursuant to such power shall operate as a complete
discharge of the Trust Fund, the Trustee, and the Committee.
12.11 Uniformity of Application.
The provisions of this Plan shall be applied in a uniform and
non-discriminatory manner in accordance with rules adopted by the Committee,
which rules shall be systematically followed and consistently applied so that
all individuals similarly situated shall be treated alike.
12.12 Disposition of Unclaimed Payments.
Each Participant, Alternate Payee, or beneficiary with an Account
balance in this Plan must file with the Committee from time to time in writing
his or her address, the address of each beneficiary (if applicable), and each
change of address. Any communication, statement, or notice addressed to such
individual at the last address filed with the Committee (or if no address is
filed with the Committee then at the last address as shown on the Company's
records) will be binding on such individual for all purposes of the Plan.
Neither the Committee nor the Trustee shall be required to search for or locate
any missing individual. If the Committee notifies an individual that he or she
is entitled to a distribution and also notifies him or her that a failure to
respond may result in a forfeiture of benefits, and the individual fails to
claim his or her benefits under the Plan or make his or her address known to
the Committee within a reasonable period of time after the notification, then
the benefits under the Plan of such individual shall be forfeited. Any amount
forfeited pursuant to this section shall be allocated pursuant to section 5.5.
If the individual should later make a claim for this forfeited amount, the
Company shall, if the Plan is still in existence, make a special contribution
to the Plan equal to the forfeiture, and such amount shall be distributed to
the individual; if the Plan is not then in existence, the Company shall pay the
amount of the forfeiture to the individual.
12.13 Applicable Law.
This Plan shall be construed and regulated by ERISA, the Code, and,
unless otherwise specified herein and to the extent applicable, the laws of the
State of Texas, excluding any conflicts-of-law provisions.
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ARTICLE XIII
UNIFORMED SERVICES EMPLOYMENT AND REEMPLOYMENT RIGHTS ACT OF 1994
13.1 General.
(a) The Uniformed Services Employment and Reemployment Rights Act
of 1994 (the "USERRA"), which is codified at 38 USCA Sections 4301-4318,
confers certain rights on individuals who leave civilian employment to perform
certain services in the Armed Forces, the National Guard, the commissioned
corps of the Public Health Service, or in any other category designated by the
President of the United States in time of war or emergency (collectively, the
"Uniformed Services"). An Employee who joins the Uniformed Services shall be
referred to as a "Serviceman" in this Article. This Article shall be
interpreted to provide such individuals with all the benefits required by the
USERRA but no greater benefits than those required by the USERRA. This Article
shall supersede any contrary provisions in the remainder of the Plan.
(b) When a Serviceman leaves the Uniformed Services, he or she may
have reemployment rights with the Company or Affiliated Entities, depending on
many factors, including the length of his or her stay in the Uniformed Services
and the type of discharge he or she received. When this Article speaks of the
date a Serviceman's potential USERRA reemployment rights expire, it means the
date on which the Serviceman fails to qualify for reemployment rights (if, for
example, he or she is dishonorably discharged, or remains in the Uniformed
Services for more than 5 years) or, if the Serviceman obtains reemployment
rights, the date his or her reemployment rights lapse because the Serviceman
failed to timely exercise those rights.
(c) This Article shall apply to anyone who was a Serviceman on
December 12, 1994, and to anyone who became a Serviceman on or after December
12, 1994.
13.2 While a Serviceman.
In general, a Serviceman shall be treated as an Employee while he or
she continues to receive wages from the Company or an Affiliated Entity, and
once the Serviceman's wages from the Company or Affiliated Entity cease, the
Serviceman shall be treated as if he or she were on an approved, unpaid leave
of absence.
(a) Company Contributions. Wages paid by the Company to a
Serviceman shall be included in his or her Compensation as if the Serviceman
were an Employee. If the Employee was a Covered Employee when he or she became
a Serviceman and his or her wages continue through the last day of a Plan Year,
then (i) the Serviceman shall be treated as an "eligible Participant" under
subsection 3.1(a) for that Plan Year (and shall therefore receive an allocation
of any Company Mandatory Contribution); and (ii) he or she shall be treated as
an Employee under subsection 11.4(a) (and, if he or she is a Non-Key Employee,
he or she shall therefore receive any minimum required allocation if the Plan
is top-heavy).
(b) Investments. If the Serviceman has an account balance in the
Plan, he or she is an Account Owner and may therefore direct the investment of
his or her Accounts pursuant to section 8.3.
(c) Distributions and Withdrawals. For purposes of Article VI
(relating to distributions), the Serviceman shall be treated as an Employee
until the day on which his or her potential USERRA reemployment rights expire.
See section 13.3 once his or her potential USERRA rights expire.
(d) QDROs. QDROs shall be processed while the Participant is a
Serviceman. The Committee has the discretion to establish special procedures
under subsection 12.9(e) for Servicemen, by, for example, extending the usual
deadlines to accommodate any practical difficulties encountered by the
Serviceman that are attributable to his or her service in the Uniformed
Services.
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13.3 Failure to Return.
(a) If a Serviceman is not reemployed before his or her potential
USERRA reemployment rights expire, the Committee shall determine his or her
Termination from Service Date by treating his or her service in the Uniformed
Services as an approved leave of absence but treating the expiration of his or
her potential USERRA reemployment rights as the failure to timely return from
his or her leave of absence, with the consequence that his or her Termination
from Service Date will generally be the earlier of the date his or her
potential USERRA rights expired or one year after the date he or she joined the
Uniformed Services. Once his or her Termination from Service Date has been
determined, the Committee shall determine his or her vested percentage. For
purposes of Article VI (relating to distributions), the day the Serviceman's
potential USERRA reemployment rights expired shall be treated as the day he or
she terminated employment with the Company and Affiliated Entities. For
purposes of subsection 5.2(c) (relating to the timing of forfeitures), the
Serviceman's last day of employment shall be the day his or her potential
USERRA reemployment rights expired.
(b) If the Company or an Affiliated Company hires a former
Serviceman after his or her potential USERRA reemployment rights have expired,
he or she shall be treated like any other former employee who is rehired.
13.4 Return From Uniformed Service.
This section applies solely to a Serviceman who returns to employment
with the Company or an Affiliated Entity because he or she exercised his or her
reemployment rights under the USERRA.
(a) Credit for Service. A Serviceman's length of time in the
Uniformed Services shall be treated as service with the Company for purposes of
vesting and determining his or her eligibility to participate in the Plan upon
reemployment.
(b) Participation. If the Serviceman satisfies the eligibility
requirements of section 2.1 before his or her reemployment, and he or she is a
Covered Employee upon his or her reemployment, he or she may participate in the
Plan immediately upon his or her return.
(c) Make-Up Company Mandatory Contribution. The Company shall
contribute an additional contribution to a Serviceman's Account equal to the
Company Mandatory Contribution (including any forfeitures treated as Company
Mandatory Contributions) that would have been allocated to such Account if the
Serviceman had remained employed during his or her time in the Uniformed
Services, and had earned his or her Deemed Compensation during that time. See
subsection (e) for guidance on applying the various limits contained in the
Code to the calculation of the additional mandatory contribution.
(d) Make-Up Miscellaneous Contributions. The Company shall
contribute to the Serviceman's Accounts any top-heavy minimum contribution he
or she would have received pursuant to section 11.4, (including any forfeitures
treated as QNECs or top-heavy minimum contributions) if he or she had remained
employed during his or her time in the Uniformed Services, and had earned
Deemed Compensation during that time. See subsection (e) for guidance on
applying the various limits contained in the Code to the calculation of the
top-heavy minimum contribution.
(e) Application of Limitations.
(i) The make-up contributions under subsections (c) and
(d) (the "Make-Up Contributions") shall be ignored for purposes of
determining the Company's maximum contribution under subsection
3.1(c), the limits on Annual Additions under section 3.4, the
non-discrimination requirements of Code section 401(a)(4), and (if the
Serviceman is a Key Employee) calculating the minimum required
top-heavy contribution under section 11.4.
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35
(ii) In order to determine the maximum Make-Up
Contributions, the following limitations shall apply.
(A) The Serviceman's "Aggregate Compensation" for
each year shall be calculated. His or her Aggregate
Compensation shall be equal to his or her actual Compensation,
plus his or her Deemed Compensation that would have been paid
during that year. Each type of Aggregate Compensation (for
benefit purposes, for purposes of determining whether the
Serviceman is a Highly Compensated Employee, etc.) shall be
determined separately.
(B) The Serviceman's Aggregate Compensation each
Plan Year shall be limited to the dollar limit in effect for
that Plan Year under Code section 401(a)(17), for the purposes
and in the manner specified in subsection 1.11(d).
(C) The limits of subsection 3.1(c) (relating to
the maximum contribution by the Company to the Plan) for each
Plan Year shall be calculated by using the Serviceman's
Aggregate Compensation for that Plan Year, and by treating the
Make-Up Contributions that are attributable to that Plan
Year's Deemed Compensation as having been made during that
Plan Year.
(D) The limits of section 3.4 (relating to the
maximum Annual Additions to a Participant's Accounts) shall be
calculated for each Limitation Year by using the Serviceman's
Aggregate Compensation for that Limitation Year, and by
treating as Annual Additions all the Make-Up Contributions
that are attributable to that Limitation Year's Deemed
Compensation.
(f) Deemed Compensation. A Serviceman's Deemed Compensation is
the Compensation that he or she would have received (including raises) had he
or she remained employed by the Company or Affiliated Entity during his or her
time in the Uniformed Services, unless it is not reasonably certain what his or
her Compensation would have been, in which case his or her Deemed Compensation
shall be based on his or her average rate of compensation during the 12 months
(or, if shorter, his or her period of employment with the Company and
Affiliated Entities) immediately before he or she entered the Uniformed
Services. A Serviceman's Deemed Compensation shall be reduced by any
Compensation actually paid to him or her during his or her time in the
Uniformed Services (such as vacation pay). Deemed Compensation shall cease
when the Serviceman's potential USERRA reemployment rights expire. Each type
of Deemed Compensation (for benefit purposes, for purposes of determining if
the Serviceman is a Highly Compensated Employee, etc.) shall be determined
separately.
APACHE CORPORATION
Date: 12/31/97 By: /s/ D.L. Schaeffer
---------------------------- -----------------------------------
Title: Vice President Human Resources
--------------------------------
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APPENDIX A
PARTICIPATING COMPANIES
The following Affiliated Entities were actively participating in the Plan as of
the following dates:
Participation Participation
Business Began As Of Ended As Of
-------- ----------- -----------
Apache International, Inc. January 1, 1997 N/A
Apache Energy Limited (known as January 1, 1997 N/A
Hadson Energy Limited before
January 1, 1995)
Apache Canada Ltd. January 1, 1997 N/A
-- END OF APPENDIX A --
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APPENDIX B
DEKALB ENERGY COMPANY / APACHE CANADA LTD.
Introduction
Through a merger effective as of May 17, 1995, Apache then held 100%
of the stock of DEKALB Energy Company (which has been renamed Apache Canada
Ltd.).
Capitalized terms in this Appendix have the same meanings as those
given to them in the Plan. The regular terms of the Plan shall apply to the
employees of Apache Canada Ltd., except as provided below.
Eligibility to Participate
Notwithstanding section 1.12, an employee of Apache Canada Ltd. shall
be a Covered Employee only if (1) he or she is either a U.S. citizen or a U.S.
resident, and (2) he or she was employed by Apache or another Company
immediately before becoming an employee of Apache Canada Ltd.
Vesting Service
For any individual who becomes an employee of Apache on or after May
17, 1995, his or her Period of Service shall include any periods of employment
before May 17, 1995, with DEKALB Energy Company or any business then treated as
a single employer with DEKALB Energy Company pursuant to Code section 414(b),
414(c), 414(m), or 414(o).
Compensation
If the payroll of the Apache Canada Ltd. employee is handled in the
United States, then the definitions of Compensation in section 1.11 shall
apply. To the extent that the payroll of the Apache Canada Ltd. employee is
handled outside of the United States, the following definitions of Compensation
shall apply in lieu of the definitions found in subsections 1.11(a) and
1.11(b):
(a) Code Section 415 Compensation.
(i) 1997. This paragraph applies for 1997 only. For
purposes of determining the limitation on Annual Additions under
section 3.4 and the minimum contribution under section 11.4 when the
Plan is top-heavy, Compensation shall mean foreign earned income
(within the meaning of Code section 911(b)) paid by the Company or an
Affiliated Entity, excluding any elective contributions that are not
includable in the Employee's income pursuant to Code sections 125,
402(e)(3), 402(h), or 403(b). For purposes of section 3.4,
Compensation shall be measured over a Limitation Year. For purposes
of section 11.4, Compensation shall be measured over a Plan Year.
(ii) 1998 and Thereafter. This paragraph applies after
1997. For purposes of determining the limitation on Annual Additions
under section 3.4 and the minimum contribution under section 11.4 when
the Plan is top-heavy, Compensation shall mean foreign earned income
(within the meaning of Code section 911(b)) paid by the Company or an
Affiliated Entity, and elective contributions that are not includable
in the Employee's income pursuant to Code sections 125, 402(e)(3),
402(h), 403(b), 408(p), or 457. For purposes of section 3.4,
Compensation shall be measured over a Limitation Year. For purposes
of section 11.4, Compensation shall be measured over a Plan Year.
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38
(b) Code Section 414(q) Compensation.
(i) 1997. This paragraph applies for 1997. For purposes
of identifying Highly Compensated Employees and Key Employees,
Compensation shall mean foreign earned income (within the meaning of
Code section 911(b)) paid by the Company or an Affiliated Entity,
including any elective contributions that are not includable in the
Employee's income pursuant to Code sections 125, 402(e)(3), 402(h), or
403(b). Compensation shall be measured over a Plan Year.
Compensation shall not include any amounts accrued by, but not paid
to, the Employee during the Plan Year.
(ii) 1998 and Thereafter. This paragraph applies after
1997. For purposes of identifying Highly Compensated Employees and
Key Employees, Compensation shall have the same meaning as in
paragraph (a)(ii), except that Compensation shall be measured over a
Plan Year and shall not include any amounts accrued by, but not paid
to, the Employee during the Plan Year.
-- END OF APPENDIX B --
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